AccountingWEB Weekly News Wrap-Up - Issue 138
March 22, 2002
This News Wrap-Up Sponsored By:
NEWS FOR ACCOUNTINGWEB MEMBERS
1. Andersen Fights Back, Pleads Not Guilty
2. New Depreciation Tax Forms Available
3. Deloitte Scrambles to Save License to Practice in New York
4. FASB Endorses Radical Change in Funding
5. SEC Responds to DOJ Action with Rules, Hotlines
6. D&T's CEO Argues Against Three "Quick Fix" Reforms
7. Andersen and KPMG Close to a Merger Deal Outside U.S.
8. FAF Issues Proposal to 'Streamline' FASB
9. Treasury Department Will Remove Abusive Tax Shelter
10.Don Kirk to Serve in Temporary Audit Watchdog Role
Amid all the media attention on auditor reform and Andersen this past week, some critical information on tax breaks for small business clients may have slipped under your radar screen. The economic stimulus package passed earlier this month included several small business tax breaks, many of which have retroactive repercussions, which may mean that an amended return for those who have already filed could save small businesses some big bucks.
Follow the link below for a quick overview of what you can do today to take advantage of some of the provisions in the new law.
NEWS FOR ACCOUNTINGWEB MEMBERS
Arthur Andersen LLP entered a plea of not guilty to criminal charges of obstruction of justice for shredding documents relating to the Enron audit. "I plead not guilty," said Eugene Frauenheim, managing partner of Andersen's Houston office, in federal court on Wednesday. The date for starting the trial has been set at May 6. If Andersen is convicted of the federal charges, the firm could face a maximum fine of $500,000 and up to five years of probation.
New tax forms reflecting the changes to depreciation laws as a result of the Job Creation and Worker Assistance Act of 2002 are now available for download.
Deloitte and Touche has been given 30 days to settle some issues relating to the firm's license renewal in New York or face the consequences of possibly losing its license to practice in the state.
STOP THE RETURNS!
Tax Act Likely To Impact 2001 Tax Returns
The Tax Act Congress passed earlier this month likely impacts many of the tax returns you're working on right now! Before you prepare another return, you need to know what's in this bill â from retroactive depreciation changes and reversal of the Supreme Court's Gitlitz decision to enhanced NOL deductions and changes to the January 1, 2001 deemed sale election, PPC's latest guide has all of the answers. For more info., go to http://www.ppcnet.com/redirect/02pt.htm and mention code AW0302 or to order by phone, call toll free (800) 323-8724, Option 6 and ask about PPC's Guide to Dealing with Current Tax Legislation and mention code AW0302.
In a significant change for the accounting profession, the Financial Accounting Standards Board has released a statement by its chairman, Edmund Jenkins, saying the FASB will support legislation that would replace its private funding with a fee collection system run by the U.S. government.
In response to the recent action of the Department of Justice against Arthur Andersen LLP, the Securities and Exchange Commission has released guidance, consisting of a package of rules, hotlines, and e-mail addresses for use by investors, clients, and other audit firms. The SEC's guidance provides helpful reassurance to investors and clients who may have been confused or influenced by the publicity surrounding the DOJ's unprecedented action.
Speaking at the Senate Oversight hearings, James E. Copeland, chief executive officer of Deloitte & Touche, spoke out against three types of audit reform proposals that some lawmakers see as "quick fixes" to perceived problems with the accounting profession.
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Big Five firms Andersen and KPMG have confirmed that they are participating in discussions surrounding merger opportunities whereby KPMG would acquire the non-U.S. operations of Andersen. Meanwhile, reports have surfaced indicating that PricewaterhouseCoopers and Deloitte are also poised to acquire pieces of Andersen's worldwide operations.
Meanwhile, Andersen client defections continue daily. See a list of who's leaving and where they are going.
STATE SOCIETY AND ASSOCIATION DISCOUNTS
NEWS YOU CAN USE
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The Financial Accounting Foundation has issued a request for comments on proposed changes designed to streamline the standard-setting process of the Financial Accounting Standards Board. The Foundation is requesting comments on a reduction in the size of the FASB from 7 to 5 members, a change to a simple majority voting requirement of 3-2, and a recommendation to expose proposed standards for a shorter period of time. Comments are also requested on the composition of the five-member board.
As part of an ongoing effort by the Bush Administration to crack down on tax shelters, the Treasury Department has announced that Internal Revenue Service officials will begin challenging transactions that generate losses with the use of certain loan assumption agreements.
Donald J. Kirk, former vice chairman of the Public Oversight Board and former chairman of the Financial Accounting Standards Board, has agreed to oversee the completion of the independence reviews of the Big Five accounting firms after the POB closes its doors on March 31, 2002.
LOOKING FOR BOOKS OR SOFTWARE?
AccountingWEB now provides access to a host of business and accounting books, as well as software packages to meet everyone's needs. See what we can offer you today:
ACCOUNTINGWEB Q&A FORUM
Visit our Q&A Forum to post your questions and share your ideas with the members of AccountingWEB! Simply click on the "Add Comments" option at the bottom of any question to add your response and comments.
Here is a sample of the questions that have been posted this week on our Q&A Forum. Post your own questions and see if you can lend a hand to others looking for help.
1. Deducting Expenses Relating to Closed Business: A client had a wholly owned S-Corporation that went out of business in 1996. He spent $4,000 this year on attorney and CPA fees to get corporate tax returns filed for 1994 and 1995. These expenses are business related and therefore are deductible...but how? On which schedule should he report this $4,000 loss?
2. Multiple Workbook Rollup Using Excel: We have a separate Excel workbook for each subcontract that gives the total hours, labor dollars, ODC & materials for each month for both budgeted and actual. This is arranged on sheets covering a given fiscal year. Is it possible to roll this into a total, cumulative contract file with the total hours, labor dollars, ODC & materials for a given month and arranged by fiscal year?
3. Definition of Auto Used for Business: A beauty salon owner has a car with a banner advertising its services. Does that mean that the car is being used 100% for business and all expenses are deductible? What if the car had the signs painted on it? Could the owner deduct car expenses as marketing?
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